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In this March 23, 1932 file photo, an unemployed man starts a fire for cooking in this vacant lot in New York City

Defaults by U.S. states and cities are rare, but have happened:

1840s

After a banking crisis, Illinois, Pennsylvania, Michigan, Indiana, Maryland, Mississippi, Arkansas, Louisiana and Florida defaulted on their debt.

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1870s

After the Civil War, roughly a quarter of the municipal debt in the U.S. was in technical default.

1930s

In the wake of the Great Depression, Arkansas defaulted in 1933. Over an eight-year period, 14 per cent of counties and 9 per cent of municipalities defaulted.

1970s

In 1978, Cleveland became the first major U.S. city since the Great Depression to default on its debt; New York City narrowly averted default three years earlier

Sources: Citigroup, Case Western University, University of Maryland

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